John Davies FCA | Seller-Side Exit Advisory

Seller-Side Exit Advisory

How Modern Deals Are Structured

Many business owners approach a sale expecting a straightforward transaction: a price agreed, paid in full on completion. In practice, that is increasingly rare.

Today’s SME transactions are often structured using a combination of earn-outs, deferred consideration, loan notes, and vendor funding, frequently alongside external bank / commercial lender finance. These structures are commonly presented as flexible, collaborative, and aligned.

In reality, they materially change where risk sits in the transaction.

What appears to be a full-value deal on paper can, in substance, leave the seller funding part of the acquisition, underwriting future performance, and carrying risk long after control has passed.

Understanding buyer thinking

Experienced buyers are often trained to approach owners in a particular way:
to build rapport early, frame deferred structures as “standard”, and focus discussions on headline value rather than payment certainty.

That doesn’t make buyers unethical — but it does mean the negotiation is rarely symmetrical.

Very few sellers are shown the buyer’s playbook, or helped to understand how deal mechanics affect downside risk, control, and enforceability.

A perspective from both sides of the table:

None of this is inherently wrong. I have used similar structures myself as a buyer — combining bank funding at holding-company level with deferred consideration serviced from the acquired business’s cash flows.

These structures can work well when they are properly aligned, transparently structured, and fairly secured.

The issue for sellers is not that these approaches exist — it’s agreeing to them without fully understanding where the risk actually sits.

Why sellers need independent, seller-side advice

The danger for sellers is not complexity itself — it is unexamined complexity.

- Deferred consideration is credit risk.
- Earn-outs are control risk.
- Security limited to “the business you just sold” is often illusory.

Without experienced, independent advice focused solely on the seller’s position, it is easy for risk to be transferred quietly, incrementally, and irreversibly.

How i help

My role is not to block deals or over-lawyer transactions.

It is to ensure that:

Risk is visible, not obscured by structure
Payment certainty is understood and priced
Security is meaningful and enforceable
Sellers retain leverage at the points that matter

That perspective is informed by experience on both sides of the transaction, and a clear focus on protecting value already earned.

Well-structured exits share upside. Poorly structured exits quietly transfer downside.

About John

I am a Chartered Accountant (FCA) and former law firm partner with over 30 years’ experience advising business owners and professional practices on growth, succession, and exit.

Alongside my advisory work, I have been a business owner and investor with direct experience acquiring, funding, operating, and exiting businesses. That includes working with bank finance, deferred consideration, earn-outs, and the commercial realities that follow once a deal completes.

This combination of professional training and lived ownership experience shapes how I work with sellers: commercially, pragmatically, and with a clear focus on protecting value already earned.

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The Problem

Many business owners are being asked to accept earn-outs, deferred consideration, vendor finance or staged payments without fully understanding the long-term risk.

What Most Advisers Get Wrong.

Most advisers focus on getting a deal done. Far fewer focus on what happens after completion, especially when part of the sale price is deferred.

How I Help

I provide independent, seller-side judgement on deal structure, risk and protection — before you agree terms, and long before you consider yourself “for sale”.

When This Matters Most

• When a buyer proposes deferred or contingent payments
• When deal structures are complex
• When certainty of payment matters to you

How I Help

I work exclusively on the seller’s side, helping business owners understand not just deal structures, but how buyers approach, frame, and control the sale process — often long before formal terms are agreed.

That understanding is critical, because risk is rarely transferred all at once. It is usually transferred incrementally, through process, timing, and expectations.

In practice, I help sellers:

1. Understand buyer behavious and tactics

I help business owners recognise how experienced buyers often seek to:

Control early communications and meetings
Shape the agenda and pace of discussions
Introduce artificial urgency around heads of terms or exclusivity
Position deferred consideration as “standard” or “market”
Suggest using professional advisers they recommend, often to accelerate alignment

None of this is inherently improper — but it is rarely neutral.

Understanding these dynamics early allows sellers to retain leverage and avoid being boxed into structures they did not consciously choose.

2. Assess deal structures and where risk actually sits

Once the process is understood, I help sellers evaluate the substance of what is being proposed, including:

Earn-outs, deferred consideration, loan notes, and vendor finance
How and when value is actually paid
What assumptions future payments rely on
Whether headline price reflects real economic value

This is where many deals begin to diverge between what looks attractive on paper and what is genuinely robust in practice.

3. Stress test certainty, control and downside

I help sellers pressure-test:

Payment certainty under realistic scenarios
The degree of control retained post-completion
What happens if performance dips, priorities change, or relationships strain
Whether proposed protections are meaningful or illusory

Small structural choices at this stage often have outsized consequences later.

4. Evaluate security, guarantees and protections

Where consideration is deferred, I help sellers assess:

The adequacy and enforceability of security
Whether guarantees are meaningful
Whether risk is being priced appropriately
What recourse genuinely exists if things do not go to plan

5. Support better decisions - before terms are fixed

My involvement is often most valuable before heads of terms are agreed, when sellers still have flexibility, optionality, and negotiating leverage.

The objective is not to block deals or slow momentum — it is to ensure sellers proceed with clarity, balance, and eyes open, and exit with as much certainty as the deal allows.

I help sellers distinguish between deals that feel persuasive in the moment and deals that genuinely protect value over time.

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Considering an unsolicited approach to buy your business?

Many business owners receive unsolicited approaches from individuals or groups expressing an interest in buying their business.

Some approaches are genuine. Others are opportunistic. Most sit somewhere in between.

At this stage, it is entirely reasonable to be curious — and equally reasonable to be cautious. The greatest risk rarely lies in having an initial conversation. It lies in how that conversation progresses, and what is agreed or assumed before proper structure, funding clarity, and protections are in place.

Experienced buyers are often trained in how to approach owners, build rapport, and shape early discussions. Very few sellers are shown the same playbook.

I work with business owners at this exact point — before they decide whether to engage seriously, and long before they consider themselves “for sale”.

My role is to provide an independent, seller-side perspective so you can understand:

What the buyer may be trying to achieve
How early conversations can affect leverage later
What not to agree, disclose, or concede too soon
Whether the approach merits further engagement at all

This is not about stopping conversations or creating unnecessary alarm. It is about ensuring that if discussions do progress, they do so on terms that work commercially for you as the seller, not just for the buyer.

If you have been approached and would value a calm, independent view before going any further, an initial confidential discussion is often the sensible next step.

Understanding buyer tactics when selling with deferred consideration

There is extensive training available for buyers on how to acquire businesses using little or no upfront capital. Far less attention is given to helping sellers understand how deal structure, process and psychology can affect outcomes — particularly where payment is deferred.

I have prepared a short seller-side briefing note explaining common buyer tactics and how business owners can protect themselves so that the deal works commercially for the seller, not just at completion.

This briefing note is shared selectively with business owners who are in active discussions or negotiations and where deferred consideration is being proposed.

Available on request as part of an confidential, initial discussion only

If you are considering a business sale — or have already received a buyer approach — an early, independent conversation can materially improve outcomes.

I work on a seller-side, confidential basis, helping business owners understand buyer behaviour, deal structure, and where risk and leverage truly sit before terms are fixed.

Initial discussions are exploratory, discreet, and without obligation.

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JOHN DAVES FCA

The Studio Lane End Bank Hampshire SO43 7FD

email: hello@johndaviesfca.co.uk direct: 07713 065178 I handle all initial enquiries personally. If I am unavailable please leave a message and I will return your call.